Chapter 7
While filing for Chapter 7 bankruptcy may seem scary, because of the potential liquidation of assets, you can make it out on the other end okay. Chapter 7 is the most common form of bankruptcy in the United States, and that means many people have applied for it and returned their life back to what it once was, but without debt.
When you file for Chapter 7 bankruptcy, your assets will be liquidated so you can pay off the debts to your name. This usually results in losing items such as:
- Extra houses
- Extra cars
- Valuable property
You won’t lose everything, however. Some of the items you keep when you are going through bankruptcy include:
- The equity in your home, up to about $25,150 per person filing
- Tools of the debtor’s trade or profession, up to a certain value
- Motor vehicles, up to a certain value
- Reasonably necessary clothing
- Necessary household goods and furnishings
- Household appliances
- Jewelry, up to a certain value
- Pensions
- Home equity (a portion)
- A portion of unpaid but earned wages
- Public benefits, including public assistance (welfare) and Social Security
Once your assets have been liquidized and you have finished the bankruptcy process, you will earn the opportunity to start over — no debts to your name and a chance to budget more properly.
Chapter 13
If you are filing for Chapter 13 bankruptcy due to poor spending, you are likely doing so because you just can’t keep track of your finances. For those of you who are filing Chapter 13, this is an opportunity to get everything organized.
When filing for Chapter 13, you will see all of your debts combined into a lump sum which you will then be able to pay off in monthly payments. Before you can file for this, however, you need to qualify for it.
To qualify for Chapter 13, a debtor must have:
- Regular income
- Unsecured debts of less than $419,275
- Secured debts of less than $1,257,850 (these dollar amounts are usually increased every 3 years according to a set formula)
At Blake Goodman, PC, Attorney, we will be able to look at your financial situation and help you decide if you qualify for Chapter 13 bankruptcy, Chapter 7, or if you need bankruptcy at all. Schedule a consultation and we will discuss your situation together. The first consultation is FREE.
